Photo by Nick M Do/Getty Images.
The U.S. economy added 157,000 new jobs in January while the unemployment rate climbed slightly to 7.9 percent, new Labor Department figures show. December unemployment was 7.8 percent. Also ticking up was the U-7 figure, our more inclusive estimate of the unemployment situation. It rose to 16.53 percent in January, up from 16.5 percent in December. This is the first rise in U-7 in six months.
The biggest news to come out of Friday’s report was buried towards the end of the monthly Bureau of Labor Statistics (BLS) press release: hiring was stronger in 2012 than originally thought. December and November were revised up by a combined 127,000 new jobs, and there were 422,000 jobs created in the spring of 2012.
All revisions accounted for, the total new jobs created in 2012 was 2.17 million.
Why such large changes? As new data becomes available, the BLS typically provides revised jobs numbers for the previous two months. But today’s release also includes the Bureau’s annual benchmark revision, incorporating data from newly available tax records.
The Washington Post has an overview of where the jobs were created (most were in construction).
While 157,000 new jobs in January shows positive growth, the figure was widely seen as OK, but not good enough.
157,000. Meh is too enthusiastic a response.
— Russell Roberts (@EconTalker) February 1, 2013
Recent economic reports are a mixed bag, but taken together they suggest a continuing recovery, just not fast enough to fill the hole.
— Betsey Stevenson (@BetseyStevenson) February 1, 2013
A positive change to note: for the long-term unemployed, the average amount of weeks spent out of a job is down to 35 weeks in January. This is a substantial decrease from 39 weeks in December.
Since we started tracking the Solman Scale and U-7, this figure usually has a change of zero-point-something from month to month, meaning a fluctuation of a few days. While 35 weeks is not ideal, the good news for unemployed job hunters is they’ll likely be out of work for a shorter amount of time than the unemployed were last year.
And as we always caution, take any one month’s data with a grain of salt. The overall trend is what’s important.
Here’s some of what news organizations are reporting online:
“The combination of stronger-than-expected job growth, combined with an unemployment rate that suggests the Fed will remain in stimulus mode, should be received well by the equity market,” said Todd Salamone, director of research at Schaeffer’s Investment Research in Cincinnati, Ohio.
“I think it’s going to be a tough slog here,” said Joshua Shapiro, chief U.S. economist for MFR Inc. “There are plenty of headwinds out there for the economy. The cost of hiring somebody is great, with benefit costs and everything, and unless companies really absolutely need someone, they’re not going to hire.”
[P]ayrolls aren’t rising fast enough to dent the unemployment rate, which showed that 12.3 million Americans who wanted a job couldn’t find one last month. The rate increased as more people entered the work force.
“With a gain of 157,000 jobs in January, the employment situation continues to improve despite slow economic growth,” said Kathy Bostjancic, director of macroeconomic analysis at the Conference Board. “The good news is that January’s employment gains, coupled with large revisions to the prior months, may translate into more consumer spending power, which helps offset some of the negative drag on after-tax income from the expiration of the temporary payroll tax cut,” she said. “The bad news is that unemployment remains stubbornly high.”
“Add it all up, and the economy seems to be holding up handily at the start of 2013, suggesting no major lingering effects from tense fiscal cliff negotiations at the end of December. But new tax increases for 2013 that worked into the fiscal cliff deal could still affect retail sales and other measures of economic performance in the months ahead.”